Question

The entry to record a return by an on account customer of defective merchandise on which no sales tax was charged includes: A. a debit to Accounts Receivable and a credit to Sales Returns and Allowances. B. a debit to Return Expense and a credit to Accounts Receivable. C.a debit to Sales Returns and Allowances and a credit to Accounts Receivable. D. a debit to Sales and a credit to Sales Returns and Allowances.

Answer 1

Answer:

C.a debit to Sales Returns and Allowances and a credit to Accounts Receivable.

Explanation:

The journal entry to record the returns of merchandise is shown below:

Sales return and allowance A/c Dr XXXXX

               To Accounts receivable XXXXX

(Being sales return is recorded)

Basically we debited the sales returns and allowances and credited the account receivable so that the proper recording could be made.